Dateline: August 21, 2008

City proposes 16-cent tax increase

A divided Clarendon Board of Aldermen proposed a tax rate 15 cents higher than the current rate last Tuesday as the city begins the process of preparing a budget for the coming year.

The board agreed that taxes would have to be raised in order to help the city get out of the financial difficulty it has been experiencing, but the division came when it was time to propose an exact rate.

The current city property tax rate is 50 cents per $100 valuation, and Interim City Administrator Phyllis Jeffers said an increase of 5.9 cents per $100 would be needed to generate the same revenue as last year.

If all other things stayed equal, the current rate of 50 cents would leave the city with a $160,000 shortfall, Jeffers said. A rate of 55.9 cents would leave a shortfall of about $90,000, and a rate of 60 cents would be a nearly break even point.

Jeffers told Aldermen that some savings can be realized in the new budget – an expected decrease of $18,000 in health care premiums, for example – but she also said the city had depleted its reserves this year.

“You need to fund reserves, and that has to be a priority,” Jeffers said. “You need to think five years ahead in this budget.”

Alderman Terry Noble suggested proposing a 60-cent tax rate, but Alderman Ann Huey disagreed.

“I just don’t think 60 cents will do it,” she said. “I don’t want to have to come back next year and go for another big tax increase.”

Mayor Mark White also said he thought people would understand the higher tax rate.

“Everything has gone up, and everyone knows that,” White said.

Aldermen Tommy Hill said he agreed with Huey that the city needs more money, but said 65 cents was too much to ask of the taxpayers.

The board approved proposing a 65-cent tax rate by a vote of 3-2. Aldermen Huey and Noble voted in favor, Aldermen Hill and Kyle Davis voted against, and Mayor White broke the tie with an “aye” vote. Alderman Chris Ford was absent.

The city will hold two public hearings on the proposed tax rate – one on September 9 and again on September 16. Both hearings will be at 7 p.m. at City Hall.

If adopted a rate of 65 cents per $100 valuation would raise the taxes on the average residence by $241.30. The taxes on the homes of disabled persons and persons aged 65 years or older are frozen and will not increase.

Jeffers also said more hard decisions would have to be made and said water, sewer, and sanitation rates may have to go up as well.

The board also approved a motion to take more than $123,000 out of the Improvement Fund and transfer it to the General Fund to cover expenses.

In other city business last week, Aldermen accepted a health insurance bid from First Care with lower premiums that the current year, accepted an agreement for repairs on the property at 716 W. Sixth, and approved two resolutions for a solid waste grant that would give the city 40 new three-cubic yard trash bins and other new equipment.